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From meisenscher@igc.org Sun Sep 30 11:11:43 2001
Date: Sat, 29 Sep 2001 21:51:12 -0500 (CDT)
From: Michael Eisenscher <meisenscher@igc.org>
Subject: Give Me A Pipeline or Give Me Death!
Article: 127155
To: undisclosed-recipients:;
X-UIDL: JF#!hm=!TI@!!`c^!!

The Secret War

By Richard Norton-Taylor, Guardian (London)
5 March 2001

A new and potentially explosive Great Game is being set up and few in Britain are aware of it.

There are many players: far more than the two - Russia and Britain - who were engaged a century ago in imperial rivalry in central Asia and the north-west frontier. And the object this time is not so much control of territory. It is the large reserves of oil and gas in the Caucasus, notably the Caspian basin. Pipelines are the counters in this new Great Game. There are plans for pipe-lines through Azerbaijan, Georgia, Turkey, Iran, Bulgaria, Macedonia - and Albania. Traditional rivalries between east and west are complicated by other threats - from Chechen separatists, Kurds, Albanian guerrilla groups, the dispute between Azerbaijan and Armenia over Nagorno-Karabakh and, throughout the region, Islamic groups whose activities are causing deep concern to Moscow, Tehran and Washington alike

... This is the region both west and east have their eyes on. It is rich in untapped oil and gas while US reserves are running down, China is desperate for more oil, and no one outside the Gulf wants to rely on Saudi Arabia, Kuwait or Iraq - which have the biggest oil reserves.

Department of Energy

Afghanistan's significance from an energy standpoint stems from its geographical position as a potential transit route for oil and natural gas exports from Central Asia to the Arabian Sea. This potential includes proposed multi-billion-dollar oil and gas export pipelines through Afghanistan, although these plans have now been thrown into serious question . . . On November 29, 1999, UN Secretary General Kofi Annan issued a report on Afghanistan which listed the country's major problems as follows: civil war (which has caused many casualties and refugees, and which has devastated the country's economy), record opium production, wide-scale human rights violations, and food shortages caused in part by drought. According to the 2000 CIA World Factbook, Afghanistan is an extremely poor, landlocked country, highly dependent on farming and livestock raising (sheep and goats). Currently, the country is experiencing a severe drought . . . The Soviets had estimated Afghanistan's proven and probable natural gas reserves at up to 5 trillion cubic feet. Afghan gas production reached 275 million cubic feet per day in the mid-1970s.

However, due to declining reserves from producing fields, output gradually fell to about 220 Mmcf/d by 1980 . . . Soviet estimates from the late 1970s placed Afghanistan's proven and probable oil and condensate reserves at 95 million barrels. Despite plans to start commercial oil production in Afghanistan, all oil exploration and development work were halted after the 1979 Soviet invasion.

Afghanistan's various provinces receive refined products from neighboring countries . . . Besides oil and gas, Afghanistan also is estimated to have significant coal reserves (probable reserves of 400 million tons) . . .

J. Maresca, Vice-President Unocal,in testimony before a House committee, February 12, 1998

Today we would like to focus on issues concerning this region, its resources and U.S. policy: The need for multiple pipeline routes for Central Asian oil and gas. The need for U.S. support for international and regional efforts to achieve balanced and lasting political settlements within Russia, other newly independent states and in Afghanistan . . . The Caspian region contains tremendous untapped hydrocarbon reserves, much of them located in the Caspian Sea basin itself.

Proven natural gas reserves within Azerbaijan, Uzbekistan, Turkmenistan and Kazakhstan equal more than 236 trillion cubic feet. The region's total oil reserves may reach more than 60 billion barrels of oil -- enough to service Europe's oil needs for 11 years. Some estimates are as high as 200 billion barrels . . .

[An] option is to build a pipeline south from Central Asia to the Indian Ocean. One obvious potential route south would be across Iran. However, this option is foreclosed for American companies because of U.S. sanctions legislation. The only other possible route option is across Afghanistan, which has its own unique challenges. The country has been involved in bitter warfare for almost two decades. The territory across which the pipeline would extend is controlled by the Taliban, an Islamic movement that is not recognized as a government by most other nations. From the outset, we have made it clear that construction of our proposed pipeline cannot begin until a recognized government is in place that has the confidence of governments, lenders and our company.

In spite of this, a route through Afghanistan appears to be the best option with the fewest technical obstacles. It is the shortest route to the sea and has relatively favorable terrain for a pipeline.

The route through Afghanistan is the one that would bring Central Asian oil closest to Asian markets and thus would be the cheapest in terms of transporting the oil.

Unocal envisions the creation of a Central Asian Oil Pipeline Consortium.

The pipeline would become an integral part of a regional oil pipeline system that will utilize and gather oil from existing pipeline infrastructure in Turkmenistan, Uzbekistan, Kazakhstan and Russia.

The 1,040-mile-long oil pipeline would begin near the town of Chardzhou, in northern Turkmenistan, and extend southeasterly through Afghanistan to an export terminal that would be constructed on the Pakistan coast on the Arabian Sea. Only about 440 miles of the pipeline would be in Afghanistan.

This 42-inch-diameter pipeline will have a shipping capacity of one million barrels of oil per day. Estimated cost of the project -- which is similar in scope to the Trans Alaska Pipeline -- is about $2.5 billion . . .

The pipeline would benefit Afghanistan, which would receive revenues from transport tariffs, and would promote stability and encourage trade and economic development. Although Unocal has not negotiated with any one group, and does not favor any group, we have had contacts with and briefings for all of them. We know that the different factions in Afghanistan understand the importance of the pipeline project for their country, and have expressed their support of it.

A recent study for the World Bank states that the proposed pipeline from Central Asia across Afghanistan and Pakistan to the Arabian Sea would provide more favorable netbacks to oil producers through access to higher value markets than those currently being accessed through the traditional Baltic and Black Sea export routes.